Overview:
USD/JPY is trading in lower range as markets await outcome of last-ditch talks between Cyprus and the European Union to secure a bailout before today's deadline imposed by the ECB. USD/JPY is soft as market participants continue to unwind short-yen positions after Bank of Japan Gov. Kuroda in his first press conference Thursday did not lay out any specific new policies that would undermine the yen or call for a special BOJ meeting this month. USD/JPY is also weighed by weaker USD sentiment after Federal Reserve's Raskin said on Friday that policy makers intend to keep U.S. interest rates low "for a considerable time"; Japan exporter sales. But USD/JPY losses tempered by demand from Japan importers; expectations of aggressive monetary easing from BOJ in coming months to achieve 2% inflation target.
Data focus today:
12:30 GMT U.S. January Chicago Fed Midwest manufacturing index, February Chicago Fed National activity index
14:30 GMT U.S. March Texas manufacturing outlook survey
16:00 GMT Fed's Dudley speech
17:15 GMT Ben Bernanke and Mervyn King speak at London School of Economics discussion.
Recommendation:
Sell below 95.11 with downside targets at 94.2 and 93.75.
Support levels:
S1 - 94.20 (Friday's low)
S2 - 93.7
S3 - 93.45 (March 18 low)
Alternative scenario:
Buy above 95.11 with upside targets at 95.65 and 95.9.
Resistance levels:
R1 - 95.75
R2 - 96.13 (Wednesday's high)
96.28 (March 15 high)
Technical comment:
Daily chart is negative-biased as MACD and stochastics are in bearish mode; bearish parabolic stop-and-reverse signal was hit at 94.34 on Friday; five-day moving average is staging bearish crossover against 15-day MA.
